2014-03-13

Premier Li Lowers The Bar

China can cope with lower growth, says Premier Li Keqiang
Premier Li Keqiang says China can accommodate economic growth lower than its stated target of 7.5 per cent and signalled the government is comfortable with the "hardly avoidable" prospect of debt defaults within the nation's risky shadow banking sector.

"There is no denying we may encounter a more complex situation this year," he said, raising the difficult balancing act of maintaining jobs growth, keeping inflation in check, alleviating environmental problems, all while improving the efficiency and quality of China's economic growth.

"We need to strike a proper balance among all these goals and objectives."

Mr Li also ruled out pumping short-term financial stimulus into the economy to artificially inflate growth.

"Without taking any additional short term stimulus measures we succeeded in meeting our [economic growth] targets last year," he said. "Why can't we do that this year?"

He said despite some domestic resistance, Chinese banks would not get a lower reserve requirement ratio to allow more credit to flow into the market.

"This is a must for us," he said. "We do not want to let today's stepping stone become tomorrow's stumbling block."

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